Ethiopia and South Sudan constructing a 220KM road worth $ 738 million through barter trade

#Ethiopia and #SouthSudan are collaborating on a $738 million #project to build a 220-kilometer #road connecting Western Ethiopia with Northeastern South Sudan. Signed in May 2023 and awaiting final authorization from South Sudan’s president, the project aims to enhance economic ties and regional #connectivity.
The road is financed through a modern #bartertrade agreement. Ethiopia will fund the construction, while South Sudan will repay the cost with #crudeoil over a five-year period following a five-year grace period. This approach mitigates financial risks and utilizes South Sudan’s natural resources to develop crucial #infrastructure without immediate cash outlays.
The benefits of this model include improved trade, reduced transportation costs, and stronger regional economic integration. However, it also carries risks, such as #oil price volatility and the need for effective project management. This innovative financing method could be adopted by other African countries with abundant natural resources to support infrastructure development and economic growth.